Europe’s competition watchdog, the European Commission, is planning to issue a “formal warning” over Universal Music Group‘s proposed $775 million acquisition of Downtown Music Holdings.
That’s according to Bloomberg, which, citing people familiar with the matter, said that the EC is preparing a “statement of objections” over the deal.
A statement of objections represents a critical juncture in EU merger reviews, formally outlining the Commission’s preliminary competition concerns.
As noted by Bloomberg, while a statement of objections (SO) signals that the EC has regulatory concerns about the deal, “most merging companies avoid a veto by addressing competition issues”.
Companies typically have opportunities to address concerns through remedies or by challenging the findings before a final decision is reached.
According to the EC, after an SO has been issued, “Parties then have the right to respond to the SO in writing within a certain period”. They can also request an oral hearing.
Bloomberg reported that the SO is “likely to be issued imminently,” but that it “is still in draft form and the timing could slip”.
“We are confident that, by continuing to demonstrate the benefits of the transaction for artists, labels, and independent music in Europe, it will ultimately be cleared by the European Commission.”
UMG
Responding to a request for comment about Bloomberg’s report, a UMG spokesperson told MBW that “this deal is about offering independent music entrepreneurs access to world-class tools and support to help them succeed”.
They added: “We are confident that, by continuing to demonstrate the benefits of the transaction for artists, labels, and independent music in Europe, it will ultimately be cleared by the European Commission.”
The European Commission has until February 6, 2026 to reach a final decision on its Phase II investigation into the deal.
UMG’s Virgin Music Group announced the Downtown acquisition in December 2024. The deal would add significant distribution and services capabilities to Universal’s portfolio, including FUGA, CD Baby, Curve Royalty Systems, and Downtown Music Publishing.
The EC opened its in-depth Phase II investigation in July, after concluding its initial 25-day Phase I review, citing preliminary concerns that the transaction may allow UMG to reduce competition in recorded music distribution across the European Economic Area.
The Commission also expressed concern that the acquisition could remove “an important competitive force” from the market for artist and label services.
The investigation was temporarily paused in September while the EC awaited requested information, and restarted it last month, with the original November 26 deadline pushed into 2026.
As previously reported by MBW, the UMG-Downtown deal did not meet the EU’s standard turnover thresholds that would typically require notification to Brussels, but it did trigger notification requirements in both the Netherlands and Austria based on their respective national thresholds.
The EC decided to look into the deal because the Netherlands triggered a legal mechanism in EU competition law called Article 22. Austria subsequently joined the referral.
According to the EC, “the opening of an in-depth inquiry does not prejudge the outcome of the investigation”.
The deal has attracted fierce opposition from independent music organizations. In July, over 200 people signed a letter objecting to the acquisition, including 20 employees from Beggars Group and Secretly Group companies, while a “100 Voices” campaign launched in October featuring testimonies from indie reps urging the EC to block the deal.
European independent music trade body IMPALA has led opposition efforts. IMPALA told us in a statement today that it “welcome[s] this news and look[s] forward to official confirmation and details of the objections.”
The org added: “We will continue to liaise with the European Commission regarding our members’ concerns. We believe this acquisition should be blocked outright, for the reasons set out in 100Voices which is an illustrative snapshot of views from the sector as well as in our cultural diversity paper, and other expert analyses submitted to the regulators. Competition and diversity in the music market in Europe, and across the globe, depend on the outcome of this case.”
In October, Music Business Worldwide published a collection of views from leaders in the global independent music distribution space on the topic of Universal‘s proposed $775 million takeover of Downtown.
In September, Downtown Music CEO Pieter van Rijn issued an open letter commenting on UMG’s proposed acquisition of his company. Van Rijn addressed what he calls “whispering campaigns of misinformation that we have seen pervade the public debate” about the deal.
In July, Virgin Music Group’s bosses slammed what they called “juvenile and offensive falsehoods” spread by opponents of VMG’s planned Downtown acquisition.
On July 2, the European Composer & Songwriter Alliance (ECSA) issued an open letter to the European Commission urging it to block the planned acquisition.Music Business Worldwide